How Daehan Shipbuilding Prospers after Undergoing 2 Workouts

August 16, 2017 08:29l08 16, 2017 16:09

Daehan Shipbuilding, a mid-sized shipbuilder in Haenam, South Jeolla Province, is seeing its order booking volume rise fast. During the first half of this year, the company won orders that exceeded twice the annual goal. Unlike any other shipyards that stopped operations of docks, Daehan has secured orders worth more than two years. It is also increasing hiring, which is rare in the shipbuilding industry.

Daehan clinched deals of building 14 "Aframax" ships (115,000 metric tons) during the first half, worth 600 billion won. Including options, the total number of vessels to build will rise to 18.

Industry officials said that this is because the shipyard succeeded in its restructuring effort as the employees voluntarily accepted pay cuts and took no-pay leaves of absence after surviving two workout processes in 2009 and 2014. As a results, the company's annual wage bill shrank to a 60-percent level from a peak of 2015. The union also took part in a bid to revive the company by continuing a no-dispute tradition for 14 years.

Another reason for success has to do with the fact that it focused on types of ships that it can build best, including Aframax ships that are small enough to pass through the original Panama Canal.